American Airlines Inc. plans to take over the vacant Delta Air Lines Inc. maintenance hangar at Dallas/Fort Worth International Airport, airport officials said.
The Fort Worth-based carrier also said Tuesday that it has begun modifying the interiors of its MD-80 jets.
The narrow-body planes will get four more coach cabin seats, when galleys in the back of the aircraft are removed, said American spokesman Tim Smith.
The changes will bring the airplanes to 140 seats,
The project also includes adding larger overhead bins, Mr. Smith said.
Mr. Smith did not detail how much the carrier will spend on the upgrades.
He said American is spending about $500 million on improvements throughout its fleet over the next few years.
The MD-80 makes up nearly half of American's fleet. At an average age of 17, the MD-80s are among American's oldest planes.
The former Delta hangar will handle work on MD-80s and Boeing 777 wide-body airplanes.
American plans to add 80 jobs there.
An airport board committee gave the lease preliminary approval Tuesday. Formal approval is set for Thursday, when the full board holds its monthly meeting.
A spokeswoman for American declined to comment before the lease is formally approved.
The lease signals the latest effort by American to expand its capacity for third-party maintenance services.
The facility will be American's third major maintenance operation in North Texas. The others are on D/FW's west side and at Alliance Fort Worth Airport.
American's board voted in March to spend up to $100 million to expand its maintenance business and buy equipment.
American, which performs maintenance on its own planes, generated almost $95 million in third-party revenue last year and wants to increase that to $175 million by the end of this year.
Delta built the 344,000-square-foot hangar at D/FW in 1972 and expanded it in 1983 and 1992.
The facility on the airport's southeast side has been vacant since April 2005.
It can accommodate up to four wide-body or six narrow-body planes.
American will be reimbursed by D/FW for up to $900,000 in repairs to bring the facility up to operational levels.
Atlanta-based Delta eliminated its D/FW hub in January 2005. The carrier filed for bankruptcy in September 2005 and shed its financial obligations for the facility in November 2005.
Delta emerged from bankruptcy this week.
Under the lease agreement, American will pay $3 million in annual rent to D/FW.
That revenue is expected to lower the airport's landing fees by 8 cents.
The lease runs through to 2009 and can be renewed for 15 years.
Staff writer Terry Maxon contributed to this report.
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Planes will get four more seats and larger overhead bins.
American has proposed renting the hangar for $3 million annually through 2009, with an option to extend the lease for an additional 15 years.
Delta will hedge fuel prices and reject a lease for a maintenance hangar at DFW.
The bankruptcy court judge also approved the rejection of a lease for a hangar at Dallas-Fort Worth International Airport.